For a universal minimum income

I once worked in a call centre where a few of the interviewers would be regularly rostered to do phone surveys about female incontinence products. Asking strangers whether they lost a teaspoon, a tablespoon or more in volume per occasion is a tough gig. Then again, the horror of the role was somewhat less visceral than that experienced by a worker I’d once represented who had to manually slit the throats of chickens at a poultry factory. At Centrelink he had listed his occupation as ‘killer’.

This shouldn’t be our legacy. Australia is one of the richest countries in a world that has never been richer. Our GDP is on track to reach AUD$73,123.05 per capita this year. That we live with poverty, insecurity and economic anxiety is a matter of political choice not necessity. We create enough value for everyone to have a basic living income. That’s why I’d like to propose every citizen, every permanent resident, receive a basic income of AUD$30,000 per year. No exceptions. No means testing. A universal minimum income.

Imagine the creativity, innovation and enterprise that would be unleashed if every citizen were guaranteed a living. Universal income provides the material basis for a fuller development of human potential. Social enterprises, cooperatives and small businesses could be started without participants worrying where the next pay cheque would come from. Artists and musicians could focus on their work. More of us would be freed to volunteer our time for the public good. Some workers would no longer be faced with the unenviable position of having to choose between supporting their families and degrading their local environment. And all of us would have the option to pursue further education. Universal income won’t solve all our problems but it puts us in a stronger position from which to start to solve them.

Collectively we create enough value for everyone to receive a universal income. Would the payment, however, of a universal income damage the very process of creating that value? The answer to that question depends on whether there would still be sufficient labour market participation to make the economy work.

Ask yourself this; would you still be prepared to work if you had a guaranteed income of $30,000? Now ask yourself another question; do you trust others to keep working? It’s my bet that many of you would want to keep working in some way, shape or form but feel somewhat dubious of what others would do. The labour market participation objection is really code for ‘I don’t trust others to keep working’, particularly when it comes to those unpleasant but necessary (and generally low paid) jobs that involve feeding us and cleaning up after us. A universal income would most likely raise labour costs for unpleasant jobs. For some jobs, workers would finally receive fair compensation for what they do. For others it would speed up an automation process that is already coming.

A universal income, in other words, would drive productivity growth and innovation across many fields. All while guaranteeing consumer demand. True prosperity and progress never came from cutting margins here and there but rather from radically new ways of doing business.

Overland is a not-for-profit magazine with a proud history of supporting writers, and publishing ideas and voices often excluded from other places.

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Godfrey Moase is the Assistant General Branch Secretary at the National Union of Workers in Melbourne, Australia. He’s previously written for the Guardian, Overland, Jacobin, and New Matilda. On Twitter he’s @gemoase.

Comments

“Ask yourself this; would you still be prepared to work if you had a guaranteed income of $30,000? Now ask yourself another question; do you trust others to keep working? It’s my bet that many of you would want to keep working in some way, shape or form but feel somewhat dubious of what others would do.”

This would completely and utterly change my life. It would help me I’m sure to overcome my chronic illness at least in part – if only for the fact that the stress of how the fuck I’m going to get by/pay my rego/pay my partner back/buy food in this expensive, expensive world would be largely solved. I’m on one of the bottom rungs; it would change everything.

It would mean I could go and volunteer and do the things that are bursting out of my heart to do. I could write more. I could choose to write for free for publications that I love that don’t have money. I could volunteer as a death cafe facilitator. I could volunteer at a hospice. I could do all the shit that I can’t do now because we live in a fucked up slave system that caters to the elites and pits us one against the other and I am fucking well sick of it! We can do better than this. This economic system is myopic and unjust.

Thanks for this, Godfrey. As a freelancer and fledgling “organiser” (of <a href="http://www.paythewriters.tumblr.com&quot;) I’ve been thinking about how to apply the idea of an award or minimum wage to precarious work. I would love to see a universal minimum that applied to precarious workers. It’s hard to see how you’d account for freeloading, but better a little freeloading than the present system of punitive welfare, surveillance and shame, the ALP’s acceptance of which should be the final word on their real allegiance to workers.

Godfrey, thanks for putting a positive and inspiring demand out for the Left to talk about, and while I’m about to put a very curly question to you, I want to say we need more positive approaches like this rather than simply defensive arguments about stopping austerity, etc.

But, rather than driving “productivity growth and innovation across many fields. All while guaranteeing consumer demand”, such a reform would directly create a crisis of capitalist accumulation. That raises the question of what you do politically to address that consequence.

It’s hard for me to write about a crisis of capitalist accumulation in the abstract.

As a system that is dynamic and flowing from one crisis to another, I can’t help but think you’re right that such a reform would contribute to such a crisis. I think, however, that initially a universal basic would contribute to growth and accumulation. In much the same way that the economic measures that led to full employment (total war investment combined with labour rights and a welfare system) pushed a relative Golden Age until the price of labour itself became a barrier to further accumulation.

The difference I see in this is that it would be a reform that builds alternative economic structures. The key question is when the crisis strikes and the strength of those structures.

“how do we get the rich, both here and elsewhere to pay the level of tax that they should be paying.”

At $30,000 more disbursed per capita, we’re talking about 50% of the GDP to be taken from them (whom else?) an distributed to the proletariat. Are there even enough rich that can be taxed at <=100% in order to arrive at such an annual sum?

This actually a pretty old idea (but I doubt Godfrey would like me citing him as a source) and Milton Friedman actually explained this concept quite well. As you’d expect he had a plan for pay for it.

He called it ‘Negative Income Tax’. Using Godfrey’s figure of $30,000 it would work like this.

If you earn under $30k in a year the government brings your salary up to $30k. So if you are earning $15k the government would give you the extra $15k. This means there is still a market for low-paying jobs, if you want to do a low paying job then you won’t suffer for doing it and if you are having trouble thinking of examples of that you probably aren’t a woman. Professional child care, elderly care, full time carer for the infirm, housewives etc are all considered valuable, necessary and rewarding jobs, they just don’t pay very well.

That $30k threshold is also your tax free threshold – earn $30k and you pay no tax but also get no payment. Milton often suggested in his examples that people who earn over the threshold should be taxed at about 50% but he also often followed that up by suggesting that I higher tax rate than that would probably be more equitable.

In this way earning more is not a disincentive. Earn $45k a year and you pay $7k in tax. Earn $200k per year and pay $85k in tax.

Gareth Morgan, a suspiciously rich New Zealand finance type & manager of various-adjective funds, made a case for basic income in NZ some years ago (2006 perhaps). As a finance type, he paired it with a simplified tax system, with taxes on consumption, income and wealth, and made it fit within the constraints of modern capitalism. (I.e. kept taxes low enough to avoid any crises of capital, flight, accumulation or otherwise.) The downside of course is that his figures resulted in a ~$12k/year package (though, not so much of a downside as you might think).

So Tim – the bottom line is you need a very broad tax base, but not necessarily astronomical tax rates. In addition to income and consumption taxes, you most likely need a tax on capital, and I don’t mean capital gains; e.g. given an assumed rate of return of, say, 5% on capital, a 30% tax rate, and a freehold house worth $400000 (as a prime example of capital), the owner(s) would have an added tax burden of 400000*0.05*0.30=$6k/year.

Advantageously, if you treat the basic income as a tax credit, then you can have a flat tax on income and maintain a progressive marginal tax rate, discouraging tax evasion without the bitter pill of regressive taxes.

Your proposal, apart of being morally questionable, does not mention a very important issue. Raising the wages of the chicken killers, will push up the price of chicken nuggets as well starting a spiralling inflation and in the end the 30 000 dollars mimimum income will not be enough to by a roasted chicken.

I would like to think that a great many of us believe in a free society. But the way we practice our freedom – the way it is institutionalised – should be constantly examined, because freedom is a very slippery concept, traditionally defined in opposition to something seen as unfree (for instance, the institutional practice of, and discourse around, freedom in the U.S. remains very much defined by Cold War politics when “unfreedom” was synonymous with “communism”).

I like to consider the question – if we believe in freedom, what are the material conditions of freedom in our society? Well, in a society such as ours, there is really only one such material condition: money. Do we believe freedom is unconditional? Then we must have a basic income.

I am not going into a debate over morality, because I assume we see the world from totally different point of views, so I concentrate on concrete touchable issues.

Every first year eceonomics student will tell yolz what I have stated about the relation between wages and inflation, but if you don’t believe me, you can make an experiment in the local open-air market, that migh cost you a few hundred dollars.

If a chicken killer earns now 10 dollars per hour, but you offer him 8 dollars as a universal income for watching telly at home, it is very likely that you wan’t have any candidates for the chicken killing job, so chickens won’t get killed and our telly watching fellow can’t find frozen chickens at the local shop when goes there to spend his universal income. So you have to offer, say, 20 or even 30 dollars per hour to find someone who wants to kill chickens. However, this means that you have to raise the chicken product prices and our telly watching fellow hardly can buy a few chickens with his unisverasl income. Then of course you might want the governmnet to control prices, but then you get back to a previous point: there will be food shortage and rationing, becaiuse you are not going to sell a butchered chicken for 10 dollars, when producing it cost you 20.

You might want to chuck out ecenomic reality and lock the doors, but it will come back to you through the windows or even the sewage system.

Economics as a discipline is unfortunately based on a number of fallacies, the main one here its assumption that everyone operates, both exclusively and “rationally”, in their own self-interest. This is demonstrably false throughout history, except in the mythical land of barter that Adam Smith and countless economists after him fabricated as the foundation for their house of cards.

The reality is, a basic income policy would have wildly differing effects, depending on the particulars of its implementation, and across the spectrum of particulars would have a significant level of unpredictability; to you, this is (apparently?) a bad thing. But of the effects I can guess a basic income policy would have, the good far outweighs the bad.

You are certainly right when say that people are not robots who base their acts on pure economic rationality. And exactly for the very same reason the universal income and generally the leftist policies based on universal solidarity fail. People are often altruistic and show solidarity but they do so to a much limited number of people than mankind or an entire country. You help the most your close family members and friends, then a broader circle a aquaintances and the least people whom you don’t know. I know you can write a check for the starving children in Africa, but eve in that case you prefer a certain group of recipients over others.

You are missing the point- people in fact often DON’T act rationaly in their own self-interest (which of course includes the interests of those they are close to).
More importantly, you’re repeating that charming right-wing assumption that those who are poor are merely lazy, and those who are wealthy- even if they merely inherit wealth- are ‘productive’. Which of course means someone who sells pyramid schemes is ‘productive’, but a small farmer isn’t. That needs the application of a little more analysis, I think.

Apaart from inflation there is another big problem: the flight of the productive, creative elements of society. If you introduce the universal income system, at that very moment the hard-working people will start fleeing the country and you will be left with those who either don’t want or can’t work. All of them will starve to death.

You might opt then to prevent people from leaving the country and build a new Berlin Wall, and force the productive elements to live in a forced labour camp to maintain the telly watching fellows.

What would you do if the mayor in your town declares from tomorrow on you have take in to your home 100 alcoholics and drug addicts, share your home with them and feed them?

The Communists took away everything from my father’s family in Eastern Europe, murdered my grand-father and deported my grand-mother to a concentraion camp along with her small children. They could take away the results of gerenations hard work anmd sacrifice, could even kill my family members but they never could break their spirit. My father escaped and swam across the Adriatic sea and eventually arrived in the free (i.e capitalist) world basically in underwear. Within a couple of years he was a successful entrepreneur again while the Communists slowly used up all the fortune and resources they had confiscated and couldn’t replace them, because they were nothing left to be taken away.

What we are missing in this debate is the Weberian notion of status. Many of us forfeit a larger income for status, i.e. artists, writers, academics, priests, social workers, teachers and so on. In other words, the capacity to attain greater social access, pleasure and satisfaction with your work far outweighs an increased income.

This idea shares common features with Modern Monetary Theory, and the job guarantee advocated by Bill Mitchell. Currently unemployment and under-employment are a huge waste of productive capacity, as well as outrageous denial of independence, agency and self-respect to at least a million people in Australia. There is a deliberate policy by OECD member central banks to use interest rates to ensure that there is unemployment of at least 5% (so-called NAIRU). It reduces the leverage of unions. Some replies to this piece have pointed to specific problems that could be caused by a minimum income scheme, but I strongly believe that unions need to develop and refine a policy along these lines, to stand up for the whole working class, not just our members. And it IS a transitional demand that would incur a backlash from employers. I can’t see how unions could achieve it without being willing to take industrial action outside the narrow confines of current laws. Godfrey – what I’d really like to know is how you see that this can be developed and pursued as a policy commitment by the union movement?